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UK Mortgage Approvals Highest In 2-1/2 Years

UK mortgage approvals rose to its highest level in two-and-a-half years in July, reports said Tuesday citing data from the lobby group UK Finance.

The number of loans approved for house purchase by high street banks rose 10.6 percent year-on-year to a seasonally adjusted 43,342 in July, which was the highest figure since early 2017. In June, approvals were 43,775.

Credit card spending grew 8.2 percent year-on-year to a record GBP 12 billion.

On a non-seasonally adjusted basis, total mortgage approvals were 95,126 for house purchases, remortgaging and other secured lending combined in July, which was the highest monthly total since July 2009.

Gross mortgage lending was GBP 26.1 billion, up 2.9 percent on July 2018 and the highest since March 2016.

Repayments rose to a record, suggesting that consumers are managing their finances effectively, the UK Finance said.

"It is possible that mortgage activity is being lifted by some people looking to complete their house purchases before Brexit occurs on 31 October, given the major uncertainties surrounding the UK successfully leaving the EU with a deal," E&Y ITEM Club Chief Economic Advisor Howard Archer said.

Improved earnings growth in tandem with current record high and rising employment may also be providing some help to housing market activity, the economist noted.

"Nevertheless, house prices remain soft on most measures and look unlikely to rise by more than 1.5 percent this year," Archer added.

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